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Top 17 Personal Finance Tips to Help You Achieve Financial Freedom

 

 

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Extra effort in managing your personal finances will definitely lead to a good usage of personal resources. With goals that are realistic and attainable, your financial standing will increase in no time.  

 

1...Set financial goals

A step that is very necessary toward becoming secured financially is setting short-term, mid-term and long-term financial goals. The fact is, you will actually use more than you should if you aren’t working toward anything specific. This will make you to come up short when you are in need of money to clear unexpected bills, not to mention when you are finally due to retire. You can easily get stuck in a terrible cycle of credit card debt and then make you feel like you never have enough money to get you insured the right way, thereby making you more endangered than you need to be to control some of life’s major risks.

 

 

 

The perfect financial planning every year gives you the chance to review your goals formally and then update them (if necessary) and easily review your progress over the previous year. Now for you to stay on firm financial footing, you have to always set financial goals.

 

2...Shop for quality items at a discount

You can always wait for sales and discounts. If you actually know that you'll need an item but don't really need it immediately, then you can simply wait until it ends up in the bargain bin or you can also try to find a coupon for it.

 

 

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Always use a coupon or you can also take advantage of a discount for anything you need or have already agreed to buy before the discount take place. Cheaper price attraction is a very simple way to get people to purchase what they don't need. You have to only buy items that are useful at particular times of year during the off-season. For instance a winter coat is normally very cheap during summer weather.

 

3...Have an emergency fund

An accumulation of money place aside to take care of the financial events life might throw your way is called emergency fund. These events which are unexpected can be very costly and also stressful.

Now the emergency fund is usually place aside for about three to six months of expenses to take care of any sudden costs such as a medical or dental emergency, car troubles, job loss, unplanned travel expenses, leaky roof, unexpected home repairs etc.

 

 

 

 

 

The fact is you actually don’t know what’s going to take place at some point in time. And no one really wants to be at the very mercy of life’s twists and turns. Your emergency fund will be of so much help if maybe suddenly you lose your job or the lets say the heater breaks in the dead of winter. You don’t have to be caught off guard!

The fact is the more steady your money and household situation is; the less you will actually need in your emergency fund.

Now what if you are part of a two-income family or you’ve had a stable job for a lot of years, then a three-month emergency fund will be just okay. However if you are part of a one-income household, earn straight commission or you are self employed, then I can tell you that a six-month emergency fund is actually the best idea because a job loss can easily mean you won’t be able to pay the bills.

 

 

 

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A six-month fund is also better if anybody in your family has a medical issue which is very chronic and always need doctor or hospital visits. Although there might be room in your monthly budget to always pay for medical bills, it’s still a very good strategy to always be ready just in case of a big emergency.

You have to ensure that your emergency fund is liquid, which means it needs to be kept in a place where you can simply get access to it quickly. The best option remains the money market account that has a debit card attached to it or a simple checking account or check-writing privileges. This way, that doctor or wrecker service can easily be paid with the stroke of a pen or swipe of a card.

 

4...Prioritize your spending

I know you sometimes see yourself asking if you’ve actually made the best decision on how to use your money? Or maybe worry that you’re placing problems which are more immediate such as a wardrobe that is outdated or rumbling belly over some long term issues such as student loans and credit card debt? You don’t have to always be worried because you are not the only person on this. Prioritizing your spending can be very difficult, but if actually done the right way, then prioritization can easily pay off.

To really know what buying decisions are most necessary, so many people usually use a piece of economic theory, even if they don’t exactly know they are. Opportunity cost is what it is called and the main premise of it is to ask yourself a question such as, “What would exactly take place if I did x with my money instead of y?” For most people who are very fortunate enough to cover main expenses and then for some, think about the opportunity cost for things that you actually want to purchase but don’t really need can simply assist in helping you more than you actually think about.

It’s a very good thing to think about: we work and make money so that we can easily spend it, and we normally spend money on things so that we can always live a comfortable life. But how often do you think about where exactly your money is going and if or not they actually line up with your priorities?

Now it’s actually not hard when it comes to prioritizing your money on paper, ask yourself what’s necessary to you and only spend your money on it. But the truth is when it actually comes to putting it into practice, then it is always a whole different story.

Various people have priorities that are different, and I so much believe that you always have to use your money on those things which actually matter to you in this life. This can be anything such as buying a coffee every morning because it’s actually a thing which makes your workday very good and to buying more shoes on your shoe collection, this might be because you care a lot about the shoe on your feet. Money really need to always go where it matters, and if it’s actually going to a place that you don’t care about such as going out on a Tuesday to eat just because you are too tired to cook, then you seriously need to put your priorities in order.

How can you achieve this? All you have to do is pick what actually matters and put a hold like crazy on the rest.

You can easily write down the top 3 places you want your money to be going which are your money priorities. If you’re absolutely serious about paying off your debt or you just want to save up for a dream car or house, you have to be very sure that these big financial goals are in the list.

5...Buy things that you need

Do you know that there are a lot of things we usually buy from time to time that we don't actually need? I know it's very good to sometimes appeal to your needs every once in a while, as long as you remain in control.

Don't always buy what you don't need or what you won’t use. If you are not sure about any item you are about to buy, then you can easily ask yourself some of these questions. Now if "yes" is not the answer you gave to these entire question, then that's actually a very strong sign for you not to use the money.

 

·        Will I always make use of this item?

·        Are you sure you will drink all that milk before it goes bad?

·        Are you sure you have enough months in summer left to wear that skirt more than just few times?

·        Do I lack something that serves the same purpose? You will have to beware of some specialized products whose role is easily done by some basic items you already have. For instance buying ultra-specialized kitchen equipment, or a special workout outfit when sweatpants and a T-shirt will work very well.

·        Will this product change my life for the better? Do you know that this is a very tricky question? But you need to buy items that encourage "bad habits" or cause you to neglect some very important parts of your life.

·        Am I going to miss this product if I don't purchase it?

·        Will this product always put a smile on my face?

 

6...Pay your personal and government bills on time

Organize to keep track of all your bills and make sure they are always paid on-time because it is very important for avoiding past-due bills, shut-off notices, and a lowered credit score. Also when you pay your bills on time, it is very less expensive and it makes you avoid all penalties and late charges.

The truth is getting a phone call from a creditor or receiving a past due notice in the mail is not a very good experience at all.

The best and fastest method is to have all of your bills mailed to you via the US Mail, and not having some bills come in the mail and some others electronically. If you wish to have some bills delivered electronically then you always have to use your email program filters so that you can always have all messages from delivered to one folder. Always check your messages on a daily basis and for bills which arrive through the mail, sort it upon arriving home immediately.

 

 

 

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You can easily make a list of all the debt you owe and the date it will be due. You are also needed to check the bill off immediately it is paid. All you have to do is just take a very quick look at your list to know what is due and when.

Immediately open all bills to make sure that they are very correct and not overdue. Also do away with all the additional ads and circulars that normally come with the bill, and then put the payment stub in the envelope, even if you intend to make the payment for the bill online.

The best and efficient method to handle your bill payment is to immediately pay the bill, if you always do this then there is no time you will miss a payment or bill. If you can’t immediately make payment for the bill, then you can simply put the envelope and bill in a place designated for bills which are still unpaid.

 

 

 

You can also set up your recurrent bills on a draft program which is automatic, utility and cable bills are the bills you can do this with. On the actual day the money will be withdrawn from your account automatically.

You also have to make sure you keep your check book very balanced, so that you will not write checks which can easily cause an overdrawn account. Now even if you do online banking, your bill pay list will still prove very invaluable because you can simply know when exactly bills are due and then remove the amount of those bills from your balance before you can write checks for non-essentials. Whenever you make use of your debit card, always write down the transaction as if it were a check so that you will avoid an overdrawn account.

Also remember that fast payment of bills is very important to your credit rating and to your credibility as a professional.

 

7...Spend less than you earn

I'm surprised how many people flout this easy but very golden of all golden rules. You seriously have to live within your means. Always control your spending. Allow yourself to have a good bit of savings, with which to invest and get more money.

You should always live within your means but also live well enough to be very happy. If what you earn is not enough to drink champagne every week, then you can drink it only once a month. But do have it if it usually makes you happy. This is all about being very informed and also in control. You are required to know what exactly your income is and also what exactly your outgoings are. You also need to know any expenditure that can easily come up, any provision you have made for contingency plans and also any future income that you are entitled to maybe as investments or interests coming to fruition.

And that actually is what it is about. Where most people normally go wrong is not whether they make enough or they spend too much, because both of those are very simple to overcome. The biggest mistake is not knowing what exactly you are doing, what is up ahead and where you are financially.

Living within your means is sometimes very tough but if you are in debts always, then all the prosperity which is yours rightfully is going to some banks which are faceless and I know they will enjoy spending it. I also bet they're having champagne so many times in a week. Why encourage them?

 

8...Debt is very bad, stay far away from it

Overspending is actually one of the big challenges we have today; spending what we can afford is still the best option. It is very difficult when you see things you really want, but you must first ask yourself can I actually afford it. If the answer is yes then its fine, go get it. But if the answer is no, then you must be honest with yourself, do not make use of the credit card for items that you don't need.

 

 

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The worst type of credit card are store cards, do not make use of store cards unless you are very sure you can simply pay off the balance every month. If you actually want to do away from debt then you must forget anything about store cards. If you also think you can simply do without a credit card then it will be very good for you to do it. If you also feel that you need a credit card but you like over spending, then you must always watch your spending. You don’t have to say I will just purchase this and make the payment later or I will purchase that because I think I need it. Keeping a very watchful eye on your spending will definitely assist you in staying away from debt. If you also decide to keep your credit card then be sure to find the best possible deal. You can always shop around for the best offers and also look for a card with a low rate. Once you have found the suitable card, you will have to keep your spending under control to stay away from debt.

By always watching the way you spend, you will always be aware of your balance and have a very good idea of what your bill will be by the end of the month. Now you have to always try to pay off your balance by the end of the month. If this becomes a problem then that actually means you seriously need to keep your spending under more control. Make sure you have a constant eye on the way you spend. It is very OK to purchase treats now and then but do not use what you cannot easily afford. You can also make a very important list of all the things you buy every month and also try to save on the same list by cutting back. You will be very amazed to know how much money you can easily save by working out your spending this way.

Always know that what you have left at the end of the month is all you have left. Do not overspend even beyond your means. This is one of the best rules that will teach you the right way to go away from debt. This can easily be accomplished with a small discipline and also the desire that you will get rid of debt. It's a very good feeling when you able to live free of debt. You can do it, all you just need is to get started and everything else will be simple.

 

9...Maintain a good credit rating

A record of how an individual has borrowed the debt and repaid the same over a period of time is called credit history. A good credit history is a very necessary aspect of your life.

Keeping a very good credit rating is of a big importance to maintain the quality of life because it assist you to have quick and easy access to loans at a very good rates of interest and also with lesser formalities.

Establishing a good credit history is the first way towards having a good credit rating. If you actually do not know your credit rating, you can simply check with the local credit bureau and get a copy of the report; this will be the first step towards this end. The absence of good credit history normally affects everybody both young and old. The challenge of not having a very good credit history is also very common among divorcees and widowed women as they might have shared the accounts with their spouse and the credit rating were reported in the latter's name. So building a very good credit history by going to apply for credit in a local business unit or bank may be resorted to in such cases. Another option is to simply open a savings or checking account to show your management of money. Also paying the bills on phones and pagers timely will demonstrate your capacity to pay. Getting a standard or much secured credit card can also easily solve the problem in building up a credit history.

When you are able to maintain a very good credit history, then it shows your responsibility in paying off your debts. You should not hesitate to seek the help of a financial counselor if you feel that the debts are getting out of your control, they are the ones who can assess the situation better and find the best option to get you out of the trauma. A credit history that is bad can easily deny you further loans and also generate stumbling blocks in finding a good job or letting out an apartment. The importance of rebuilding the credit history assumes significance in such a situation. Getting a credit card that is standard or secured and making repayments and payments of different bills on time to mention just a few would help you to get back to a very good credit rating.

 

10...Avoid get rich quick scheme

There are a lot of get-rich-quick schemes out there now that you have to always avoid. While there are some opportunities online which can help you get-rich-quick easily but with lots of hard work and study, there are also a lot of schemes which you also have to identify and discard.

So many get-rich-quick schemes come by almost every day and in so many numbers. This is actually because the internet is a way in which you can easily reach a lot of people at a very small or no cost at all. You can easily and pretty much tell these email recipients anything you want, and some people will definitely catch on to what you are saying.

If you will like to know the main reason why a lot of people get scammed on these get-rich-quick schemes, then look no long further because you can take a good look at the original get-rich-quick promise, which are casinos. At a casino, it is the fun of winning so much at one particular time and losing everything in the same night or even so many times a night. With a get rich scheme, it is actually like giving someone hope for a very good future. It also invokes a very good sense of duty or a feeling as if one is actually doing what is the right thing for their families and themselves, while seeing some other people as they are not. This can give the person that is being schemed with so much increased confidence as well as a sense of hope that is increased. This hope can easily and always work against the person who is being schemed because they will keep on investing and investing their money so that the hope can always keep alive, because if they actually stop paying on the get-rich-quick, then they run the risk of losing out everything if the scheme is in fact very true.  

Get-rich-quick schemes are a very dangerous and serious issue. They are sometimes on many news articles and are always featured all the time in order to just objectify the people that have already been schemed. One of the most honest news reports that I have ever seen on the matter is the Dateline NBC report "To catch an identity thief". Chris Hanson was featured, he was the one who found people that has already be schemed and shows them that all kind of person can easily fall for a get-rich-quick scheme and that nobody is immune from it. Chris also follows so many schemes from start to conclusion, before he finally reveals to the people who are the perpetrators of the get-rich-quick scheme that he knows of their strategy and that they are on camera and all America are seeing them.

 

11...Avoid multi-level marketing programs

One thing that has become a rage among the people and small investors is Multi Level Marketing business. A lot of people have actually gained lots of success by using this very important marketing technique but at the same time, so many people have fallen victim to certain swindlers who run the fake Multi Level Marketing businesses. Outlined below is a detailed list of important facts that can assist you to easily avoid becoming a victim of any Multi Level Marketing scam.

Always make sure that you do not link or identify with a new company that has very high expectations. If the company is promising to give you lots of money for just a single referral, then just know that there is something very fishy there for sure. You have to make sure that you see the very logic behind any offer a company is offering to you so that you can simply become its affiliate.

Multi Level Marketing is actually a process and it normally takes lots of time to make your network grow. If your affiliate put pressure on you to expand your network in a very short period of time, then the company has a plan of actually trying to rob you off your hard earned earnings and benefits. You have to always make sure that you cut loose before anything unfavorable or bad begins to happen.

Asking the middle path is always secure and safe. Associating yourself with a mid-level organization that has a very good payout is always helpful. But, it needs lots of dedication and hard work to rise up in the hierarchy.

Do not forget to always get the invoices of initial payments you make to become a member of any affiliate network. Some physical MLM businesses need you to start by paying initial membership fee. But, the fake MLM businesses sometimes try not to give any invoice, because they actually do not have any business proposal.

 

12...Keep track of your financial records

How do you think you can actually be secure financially if your financial records are at a mess? Organizing your financial records needs lot of consistency and discipline. If you aren't disciplined enough to file away some very important papers and then throw out the useless ones, so how then will you be able to discipline yourself so that you can easily keep track of your retirement savings and some other important financial records?

The first thing and most important thing that you need to do is to buy a fireproof cabinet so that you can keep copies of some very important financial papers. Then also get a good and safe-deposit box to simply secure documents such as your birth certificates, will, insurance papers, passports, adoption papers, mortgage papers, car titles and so on. You will have to keep copies of all of these papers at home in your fireproof cabinet for simple access.

Now what are the right type of documents you should keep? Keep all documents that are legal including your living will and also power of attorney. Also keep tax returns and investment records from your brokerage firm, mutual fund companies and retirement accounts need to also be kept for some tax purposes. You also need to keep all insurance policies such as car, life, liability and homeowner’s policies.

Always keeping all these documents very organized takes a lot of effort and time. Spending just a few minutes every day to clear and put away and also file your financial papers is very easy and yet very effective in staying organized. It doesn't necessarily have to be very big or hard. Something as easy as just keeping a very large manila envelope on your table or in the drawer of your desk always works to put all tax related receipts works to keep the clutter down.

You have to shred any outdated policies to reduce clutter. You actually don't need to keep insurance policies that are expired or warranty information for products you no longer own.  

 

 

 

 

13...Spend responsibly

Are you aware that spending money is actually a big part of life? Almost everybody knows this but what people don’t know is that good spending habits are very important to your financial success just like getting rid of your debt and saving money.

When you have spending habits that is good, it makes you not to pay too much for a product, overspending in your restaurant budget, or impulse buying a curling iron that doubles as a knife sharpener from an infomercial. Nobody really wants that. When you use money in a smart way, your money goes further. 

 

14...Here are some ways to put good spending habits into place so you can make smarter purchases.  

·        Create a plan.

·        Research before you shop.

·        Avoid your spending triggers

·        Find an accountability partner

·        Don’t shop while you wait

·        Develop patience

·        Look for savings before you buy

 

15...Be insured

Do you know that having the proper type of insurance is good to sound financial planning? Some people may have some form of insurance but only few actually understand what it is or the reason one must have it. For most people insurance is a form of investment or a good tax saving avenue.

Now what exactly is insurance? It is a way of rolling out the financial risk of a business entity or an individual to a group of people or business entities just in case an unfortunate thing takes place. The cost of being insured is actually the monthly or annual compensation that is being paid to the insurance company. But in the purest form of insurance if the event that was predefined does not happen during the period specified, the money paid as compensation can never be gotten back. Insurance is actually a means of risk spreading among a large number of people who are insured and make lighten their financial burden in the event of any shock.

Whenever you decide to get protection from financial risk and make a contract with any provider of insurance then you automatically become the insured and the insurance company will become your insurer.

The fact is any risk which can be quantified in terms of money can be insured. For instance just to protect loved ones from loss of money due to premature death one can easily have a life insurance policy. To also protect yourself and your family members against any unforeseen medical expenses you can simply get a Mediclaim policy. You can have a motor insurance policy to protect your vehicle against robbery or damage in accidents. You can choose a home insurance to protect your home against theft, damage due to fire, flood and other perils.

The most popular types of insurance around the world are health insurance, motor insurance and life insurance.

 

16...Implement retirement planning strategies

I know you might already have an idea of what you plan to do immediately you retire: purchase a vacation property, travel the world, renovate the family home etc. The fact is your retirement dreams will definitely come to fulfillment if you start planning them right from this moment.

So to simply implement a savings plan that will assist you live out the life you want after retirement, you must start by taking a look at your current assets in relation to your objectives, however you also have to think about your investments fiscal consequences, your income sources, your succession plan and all other things that can easily affect your savings ability and your future income.

You can simply get an advisor who has the necessary experience to assist you in this process. With his assistance, you can easily and rightly define your objectives and retirement needs, as well as knowing the perfect plans to use at some point in your life.  

 

 

 

 

 

17...Patience is the main key to successful investing

There are a lot of keys to successful investing, and patience remains one of them. But so many people want all things to take place very quick. We get very annoyed sometimes if we are in a building and the Wi-Fi isn’t fast enough. Just like most times when our Snap chat takes so long to send, we become very impatient and frustrated.

The point is that we always expect result straight away and this is not right when we are hoping to be successful in our investing.

While efficiency and convenience is good, I believe the habit of hoping to get fast results is very bad for our future. In wanting all things to happen very fast, we normally lose our patience to hold out for opportunities and dreams which are more fulfilling.  

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